Unless you’re Donald Trump or refinancing is your hobby, getting a mortgage is probably not something you do often. Borrowers tend to see it as a serious commitment to a house and to a loan.
And why not? Finding the “right house” and getting a mortgage is a big deal! Something people very much want to feel they got right.
So what’s the best way to go about maximizing your chances of getting a mortgage you’ll be delighted with?
Two important things to remember: 1) Be very skeptical of any advertising — especially radio commercials — that seems to put down the way other lenders do business, and 2) Don’t be in a hurry.
Recently there’s been a lender running radio commercials saying they give firm quotes on mortgage rates right over the Internet. They imply there’s something wrong with lenders who won’t.
To be able to provide a firm quote on a rate over the Internet, they’re either expecting people to enter a tremendous amount of personal financial information on their website, or maybe what they’re offering is a kind of one-size-fits-all rate with a lot of “details to be ironed out later.”
There’s an excellent reason why most mortgage lenders won’t give you a firm quote on the rate you’ll be paying without having a serious talk with you first. And you should absolutely want to be with a lender who insists on spending that time with you.
Getting a mortgage is complicated! It’s not the same as buying a book or downloading a song. There are so many moving parts, so many different ways to go.
Which is why the first answer to most questions borrowers ask lenders about a mortgage is, “It depends.” It depends on the house you’re buying and whether you’re selling another house too, or if you’re a first-time buyer. It depends on your finances, especially if you have a few dings and you want to know how they’ll affect the loan you get.
It often happens that a borrower will come in to talk to a loan officer, and they’re convinced they want one particular loan because they heard about it or that’s what a friend got. And it turns out what was right for their friend isn’t right for them. The details make all the difference.
Take your time with this big decision. Meet with a few lenders. Have a list of the things that are important to you. Ask if there are options you haven’t considered but should.
Beware of any lender who tries to hurry you. Beware of any lender who implies your situation is so unique they’re the only ones who will lend to you. Beware of any lender who seems to be pushing you in any direction at all. Listen to your gut, and if your gut isn’t sure, get an objective second or third opinion.
Bonus tip: Ask your lender if they work on quota or commission. That shouldn’t necessarily be a deal-breaker, but you want to understand how that affects what loan options they discuss with you. Because it might!
Nick Maffeo is the President & CEO of Canton Co-operative Bank in Canton. “Smart About Money” is a regular column he writes for the Canton Citizen. Have a financial question you’d like to ask? Email to email@example.com.